Current Trends in Corporate Learning & Performance
(Note on this illustration: This word cloud is a visual content analysis of ASTD’s 2009 report, which I generated through wordle.com.)
I recently reviewed the two key annual studies of trends in corporate Learning & Performance: Bersin & Associates Corporate Learning Factbook 2010, and ASTD’s Annual Review of Trends in Workplace Learning & Performance, the 2009 State of the Industry Report. I found that these studies contradict one another in some fairly significant ways, e.g., Bersin said that companies’ L&D budgets fell precipitously in 2008 and 2009 as a result of “the faltering US economy,” while ASTD said that, “investment in workplace learning and performance was stable in 2008 …”
As in any study, the analysis can only be as good as the sample data available, and conclusions are always an outcome of what you measure. Without going into an in-depth critique of the two organizations’ methodologies, suffice it to say that they measured different things in differing ways. Bersin’s study is limited to US trends and ASTD’s data is global. Bersin is using data from 2009 and ASTD’s report is based on 2008 data. Also, ASTD’s data includes corporate expenditures for tuition reimbursement. These limitations being clear, I wanted to know: What may we as consultants learn from these two sources about significant current general trends in L&P that will help us to serve our clients and meet their needs?
If it is true that there has been a downward trend in spending on training operations by small and large companies – at least in the US, how could that be good news for L&P consultants?
According to Bersin & Associates, training budgets fell in 2009 at the combined rate of 21% from 2007 levels. According to ASTD, from 2007 to 2008 (the latest data available), “The average annual learning expenditure per employee fell from $1,110 in 2007 to $1,068 in 2008, a decrease of 3.8%.” Bersin’s survey puts the 2008 median training expenditure at $714 per learner.
These reductions were no doubt in part the result of reduced employee headcount during the general economic downturn of the past two years: Fewer employees means less training. In 2009, L&D staff also experienced significant reductions – Bersin calculates a 4% reduction for small businesses and 8% for large companies.
And to top it all off, according to ASTD, “Since 2004, organizations have relied less on outsourcing each year. The average percentage of the learning budget allocated to external services was 22.0% in 2008, down from 25.2% the previous year.” Smaller budgets, and a lesser percentage going to outside L&P contractors would suggest a smaller market opportunity for L&P consultants.
So what’s the good news?
Unlike economic downturns in the past, ASTD survey respondents agreed with the statement that, “We placed/are placing a stronger emphasis on learning than the last downturn.” Agreement was 37.9% vs. 24.5% in past surveys. Outsourcing is a strong trend, and it seems that the greatest opportunity is for consultants who offer added value …
Learning & Performance professionals have learned to become more productive with less resources available.
The number of hours of formal learning content available per L&P staff member rose to an average of 353 hours in 2008, reflecting a trending increase over prior years (ASTD). At the same time, the consolidated average cost per learning hour available decreased 8%, from $1,660 in 2007 to $1,528 in 2008 (ASTD). In addition to increased availability of content, in 2008, L&P facilitated a slightly greater average number of used hours per staff member – from 5,497 hours in 2007 to 5,507 in 2008.
ASTD reports a reduction in the average annual learning expenditure per employee; from $1,110 in 2007 to $1,068 in 2008, a decrease of 3.8%.
The trend: L&P organizations are delivering just as much, but with less resources. Both ASTD and Bersin & Associates predict that this productivity trend will continue through 2009 and beyond.
How have Learning & Performance professionals achieved this greater level of productivity?
Some factors are obvious, such as an increase in the average number of employees per learning staff member; 253 in 2008, up from 227 the previous year (ASTD) – L&P associates and organizations are working harder.
Also fairly obvious, is that online delivery of learning content, including remote instructor-facilitated online courses, self-study e-learning, and blended methodologies, ultimately reduced associated delivery and administrative costs such as staff time and travel & lodging expense. (However, I note that ASTD reported a rebound in classroom-based instructor-led learning in 2008 – possibly as a result of companies slowing capital investment in technology due to the down economy.)
Other significant factors yielding greater L&P productivity – factors which are more difficult to quantify – included:
- Improved matching of the right training to the right employees, yielding greater impact and less waste, or “scrap” training;
- A sharpened focus on training employees in their specialized competencies, as well as an emphasis on product related training content in order to yield greater sales productivity;
- Enhanced repeatability of training programs, less time required by L&P professionals to prepare courses, train-the-trainer initiatives, and the reuse of materials through in-house and third-party online Learning Management Systems;
- Continued centralization of training operations through corporate services, providing greater learning opportunities across multiple lines of business;
- Better alignment of training initiatives to corporate strategic priorities;
- Continuous improvement of training courses, materials and instructor/facilitators;
And, perhaps most importantly:
- According to Bersin, the “use of external instructors and facilitators remained the largest area of outsourcing, followed by use of external content developers, which was up significantly in 2009.” ASTD’s study directly contradicts this finding: “Since 2004, organizations have relied less on outsourcing (spending on external services such as consultants, workshops, and training sessions from outside providers) each year. The average percentage of the learning budget allocated to external services was 22.0% in 2008, down from 25.2% the previous year.” Perhaps the difference between the two studies is Bersin’s US-based data, and ASTD’s international data.
What are the trends for the near future?
- Chief Learning Officers are increasingly recognizing the value of testing and evaluation in the continuous improvement of Learning & Performance programs.
- Learning & Performance professionals have acknowledged the real importance of informal learning networks – most corporate learning takes place outside of formal classroom settings and online courses. Recognizing the importance of coaching, mentoring and online social networking, L&P planners are looking for creative and effective ways to use new technologies in their learning programs.
So what’s it all mean for L&P consultants? Both studies go into much greater detail than is covered in this brief article. But what is clear from this information is that as consultants, we need to continue adding value beyond content development in ways that will enhance our clients’ productivity and efficiencies, as well as helping them to creatively align learning initiatives with their company’s strategic goals and objectives.